Paul Hoo & Brian George - 10 years and counting

Barbara Ellington, Lifestyle Editor

This year marks the 10th anniversary of Supreme Ventures Limited (SVL) and as part of the month-long celebratory activities, Outlook will take a walk through the years with the company's senior executives starting this week with Paul Hoo, chairman, and Brian George, CEO. Next week, we will hear from company Director Ian Levy.

Barbara Ellington: Look back to 10 years ago when you started and reflect on how it has been.

Paul Hoo (PH): Through the effort of the team, we have accomplished beyond our expectations, we have cultured an organisation where the employees are happy with existing jobs and the potential to further themselves.

When I spoke to you five years ago, Paul, you said it was a challenge to find the first 180 agents, how many do you have now?

PH: It's just under 1,000 now; people are eager to sign up but we have a responsibility to protect them because increasing the distribution could be to the detriment of existing agents, so it's a constant investigation whether we have satisfied the market needs. I don't think any other entity is distributed across as wide a spectrum of Jamaica as Supreme Ventures. Our products are available everywhere, the technology offers services that are sometimes unrelated to a game of chance but after 10 years, we continue to see the horizon move.

Five years ago, you said it was hard to convince people that a well-run lottery could work in Jamaica and in the Caribbean, how do you feel now, Brian?

BG: The numbers speak for themselves, not only have we made it work, but we have become the model for the rest of the world to look at. The things that we have been able to accomplish in 10 years, such as being the first lottery operator to do phone top-ups, may seem insignificant in the grand scheme of things but in the world of cellular technology, it's a significant step forward that we were able to anticipate 10 years ago. We have made a lot of changes technologically and operationally and therefore we have diversified the business in ways we did not anticipate in 2001. We are very proud of it.

Apart from the obvious big stride of being listed on the stock exchange, what are some of the significant milestones?

BG: We have gone into the business such as at Acropolis and Coral Cliff; we never anticipated being in the restaurant business, we have opportunities to deal with people in many ways and we have grasped them. Paul talked about the number of agents; what must never forget is the 200-plus jobs that have been created through the agents. We started our operations with 28 people, we now employ close to 400. The things we are doing today, nobody anticipated that we could have done them 10 years ago.

While the founding directors had the vision of what we could be, convincing people it was possible was incredible; we are now at that point.

With gaming lounges like Coral Cliff and Acropolis throughout the island, do you have any plans to go into casino gaming in a big way?

PH: It's currently a work in progress, we continue to learn that aspect of the business and through investigation. We would look at opportunities in other areas of the island to further branch out but at this point, we are not sure we have the experience to look at a full-blown casino as the licences suggest for the north coast. We are in the entertainment business and just by virtue of the products we offer, we have looked at it but we have not taken a decision.

BG: The saying goes, "fools rush in where angels fear to tread". The reality is that the dynamics of the world economic situation also dictate what we do. When we started the business, the question of how world travel would have changed as a result of 9/11 did arise. We did not know that destination/casino tourism would have been affected by the world in which we live today. I saw recently where The Sands in Las Vegas closed down and the casino industry is having its own challenges. The industry requires deep pockets, so all of those things would have to go into any consideration or decision that SVL would have to make in arriving at a final decision; it's not a frivolous thing.

How did the recent and still not completely over recession impact you. It's ironic that when people are depressed, they drink, smoke and gamble but, seriously, what were the strategies that you employed to help SVL ride out the recession and what are your plans going forward?

BG: We had the perfect storm in Jamaica (both the worldwide and our local recession), ours was influenced by the worldwide recession, which had an effect on remittances ... a major source of revenue for Jamaicans and, by extension, a major source of revenue for Jamaica and our potential customers. Added to that, you had the effect of the crash of Olint and Cash Plus which would have had a debilitating effect on people's cash capabilities.

What we did was keep focused, we continued in our roll-out of games, we added more games and draws; we continued to do what we did to become successful and did not allow ourselves to become distracted or get into a disaster mode. It has paid off. Fortunately, we have a very appealing product to offer and while we don't have the ability to discount and run promotions on our products, what we can do is increase availability so that adding draws and adding to the agents network is a way of maintaining our share of the pie.

It's important to note last year was the first that we didn't grow by double digits in terms of our gaming products, that indicated to us that we did feel the recession but we saw it as a slowdown, not as going backwards, we will see how this year plays itself out. We have seen the initial indications that things are getting better in the marketplace.

So every year since of the 10, you have had double-digit growth?

BG: Don't forget that we had to weather other storms such as the win tax in 2003, which in many respects gave Paul a lot of credibility because when he presented the concerns of the industry, he predicted what the effect of the tax would have been and almost to a dollar it matched that. It was a turning point for us in terms of how the industry was seen and also the voice that it established for him.

Paul you tried many ventures before you settled on the 'supreme' one, do you feel up to starting any new businesses at this stage of your life or adding something to the suite of offerings you now have?

PH: We feel that everything we add to Supreme Ventures is a new business and we continue to bear that in mind; some will be successful and some will not but we are motivated to increase, through various means, our revenue and therefore value to our shareholders.

What are your thoughts on the matter, Brian?

BG: I think it's instructive that when we look at the dialogue in the marketplace; you never see us using the JDX as an excuse for our performance good or bad. We used the surplus funds to invest and sometimes painfully to reinvest in the business as opposed to maximising the means of generating increased profits in the short term so that when you look at the board's direction to build a solid foundation rather than looking for less difficult solutions in the short term.

You had many detractors from the church to others, in setting up this business, have all the objections ceased?

PH: Yes, we had criticisms. I am a Catholic and I have my own views as to what we do at SVL, so it's not fair to say we have silenced churches. Without strict guidelines within the churches, our products may have become more acceptable. As far as I know, there is nothing against gaming as long as it does not endanger the livelihoods of the dependants.

BG: I agree, history is the best teacher. When we started, those who had concerned voiced them and that was very useful and legitimate and it certainly ensured that how we did our business represented a responsibility to that voice. But when you look back 10 years later and see that some of the prophecies of gloom about what the industry could have meant and when we look at the benefits such as the CHASE Fund; we have paid out over $100m in prizes, whatever the concerns are, they have been somewhat ameliorated by some of the concerns that existed over the last 10 years.

SURPRISE/GAMES FOR 10TH ANNIVERSARY?

BG: Among the activities was the agent appreciation at Caymanas Park recently.

The players of our games will get more payouts in an anniversary promotion and in the corporate sector, we will also be doing something to show appreciation to entities like the banks that took risks on us.

We will also be recognising staff at 10th anniversary long-service awards function, in particular the two women who have been there from the start.

How would you like to see the next 10 years?

PH: It's like starting at square one, all the things we have done in the last 10, we hope to replicate with new features, increased revenues, continue to look internationally, and the Super Lotto that we pioneered, we will continue to make it grow.

How has the response to the Super Lotto been?

PH: It has not been very good but that is based on population density. We had intended to start with three and roll out in eight jurisdictions. But things did not go as planned for a couple of reasons. Unlike the United States that has one country and one language, we are dealing with a region that has different languages.

YOU are not yet in all the Spanish-speaking territories and how well supported is the Super Lotto in the countries where its located?

PH: About 10 per cent of regular lottery buyers, purchase Super Lotto tickets.

BG: The success all lottery business has to do with winnability; when you buy a ticket, you are asking two questions, can it be won and can I win it? Cash Pot answers those questions every day. So that's something else to overcome. When we started out, we had a greater expectation of participation from other territories, success in Jamaica was what we anticipated. We thought people would try it; but it was deemed difficult to win because participation was nowhere near what we anticipated, so we then had the challenge of the first question.

Once you begin to expand the number of territories the winnability will no longer becomes the issue; the only question then will be, can I win it? So that is the time when ticket buyers will accept the odds.

Why didn't you give the first Super Lotto winner some local visibility, so we could be more convinced?

BG: In retrospect, perhaps we should have, we were praying that the winner would have come from here.

Once upon a time winners of the local lottery would wear elaborate disguises to come to collect the cheque, have you downplayed the local big winners?

BG: No, but $50m is not what it used to be and winners also ask to be given less publicity, so we respect that.

What lessons have you learnt over the 10 years?

BG: It's very easy for people to label your success as luck but whatever industry you are in, it takes a lot of hard work and there is no substitute for it. The Lotto licence is a privilege and we continually have to earn out right of existence every day. We are not a 'too big to fail' industry.

What about Caymanas Park, when we spoke five years ago, we discussed the possibility of you operating it, is Supreme Ventures still interested in that project?

PH: Like casinos, that's a business that we have no experience in. However, the gaming industry is of importance to us and what racing does could affect us positively or negatively. It is quite possible that if there are partnerships to be formed with respect to business that we currently do in the sector, we would certainly be interested but I don't think we have the knowledge or expertise in operating a racetrack. But Caymanas is obviously a concern to us.

BG: I don't know horse racing but we are interested in the success of Caymanas, we don't know what role we can play but we are anxious for it to be successful because it helps the industry generally.

Brian, you are obviously a successful businessman, have you completely forgotten the science part of your training?

BG: Science teaches you logic, and nothing works better for you in management than logic.

Are you committed to SVL for the long haul?

BG: I am committed to SVL for the long haul and I also recognise that I have to earn that over the years I cannot rest on my laurels.

Has he earned it, Paul?

PH: Certainly.

You both went through severe health concerns recently, share with me how those illnesses have made you better, wiser, focused you more and forced you to take stock of how you manage yourselves in order to continue to manage the business and your responsibility for so many others whose livelihoods rest on your shoulders in sickness and in health?

PH: Being ill brings you back to a sense of reality that time does not last forever; it makes you aware that having not been through it or recognised it before, you now understand some of the challenges that your employees face and you can look at ways to assist. It makes you also aware that succession planning is key to your business because the show must go on.

How has the illness made you look at yourself in relation to the work you do every day, how much have you cut back?

PH: I have been able to depend on other people now rather than try to do it all alone, to use their expertise in helping to manage the company.

BG: Illness forces you to understand the importance of balance, the feeling of vulnerability that you get when you are flat on your back is really a sobering experience. At the same time, it's an opportunity to discover the skills of the people around you. It really gives you the opportunity to shed your own Superman mindset that makes you think you can carry the world on your shoulders and give others a chance to be more involved. It makes you a lot more balanced. At this level, we are not task workers, a lot of what we do is mental, so we don't get to shut off our brains; we are always working and thinking about the business. We never stop working but we now balance things.

Any regrets?

BG: Anyone in life with a sense of introspection who has not had opportunity to regret a decision or choice is not living at his optimum or taking any risks, the key is to get up and go afterwards.

PH: I have no major regrets. For every challenge, I just look at the future and focus on the positive.

Any surprises along the way?

BG: To see people who have achieved beyond my expectations, to see young, bright, inexperienced people who have contributed significantly to the company.

PH: None

What about the lows and highs?

PH: The tax and not knowing whether it would be rescinded or lowered; it was devastating but we have been able get past that and increase in sales.

BG: The first day of sales was the high point for me and all the challenges and excitement that had to be tempered with reality. Then a year later when the agents started coming in and we began growing, it was hard labour but worth it.

What is SVL's best kept secret?

BG: Our staff who have helped to build a successful company; it's been a time of great change and expectation.

barbara.ellington@gleanerjm.com